If inflation is easing a bit, why are food prices still going up? It’s a question Whole Foods is asking its suppliers.
The Wall Street Journal reports it has viewed the recording of a virtual summit between the grocery chain and its suppliers, at which the Amazon-owned company asked suppliers to go easy on the price increases, saying consumers are stretched thin as it is.
For their part, food suppliers say they have absorbed a lot of increased costs over the last few months. They point to higher transportation costs, along with rising labor costs and increased producer prices. Many of these costs have already been passed along to shoppers.
Whole Foods told suppliers that consumers have begun to balk and asked that suppliers find ways to reduce their prices.
“We know our customers are weighing the impacts of inflationary pressure on their buying choices,” Alyssa Vescio, Whole Foods’ senior vice president of merchandising of center store, told suppliers.
Walmart has taken similar action
In November, Walmart also asked its suppliers to stop increasing prices because consumers were struggling to pay. At the time, the Journal reported Walmart CEO Doug McMillon, in a speech to companies that supply Sam’s Club, made it clear that the company would push back against price increases.
McMillon told the attendees that if they want consumers to spend more, then they need to come up with more innovative products.
A Whole Foods spokeswoman said the chain has already absorbed many of the higher costs it faces and has worked with suppliers to try to limit the pain of inflation. She said prices have risen more slowly at Whole Foods than at competitors.
In a matter of days, the U.S. Labor Department will issue its Consumer Price Index for January, revealing the status of food prices. In the December report, the government reported the price of food prepared at home rose another 0.2% during the month and was up 11.8% over the last 12 months.
Breaking down food categories, three of the six major grocery store food group indexes increased over the month. The cost of meats, poultry, fish, and eggs increased by 1%. Eggs alone were up 11.1%.